Bitcoin has seen quite the rally in the past few days. People who haven't paid much attention to the news may be confused by this since we were just talking about the certainty of a hard fork on August 1st. Well since then, things have changed.
In my last blog post, I mentioned that Bitcoin was decreasing due to the potential hard fork caused by miners not signaling for Segwit (it needed at least 80%, and at that time, it was less than 50%).
Fast forward to today, and over 80% of miners are signaling for Segwit! If you go to www.xbt.eu, you can see the exact percentage of miners signaling 82.8%. You can also see that only 18 blocks are needed for a lock-in for BIP91. These blocks have been decreasing by 1 about every 20 minutes. This means that we could see a lock-in tonight!
The goal of BIP91 is to prevent a chain split from happening by makeing BIP148 and SegWit2x compatible with one another. Considering how both concepts will activate on the network within 36 hours of one another, compatibility is of the utmost importance. Once BIP91 activates on the Bitcoin network, all of the network nodes signaling this solution will reject blocks which are not SegWit compatible. This is exactly what BIP148 aims to achieve as well, as its top priority is to ensure that Segregated Witness activates on the Bitcoin network once and for all. Choosing this golden path between BIP148 and SegWit2x would allow both parties to get what they want: we would see the activation of SegWit2x with its 80% mining support threshold, while still also honoring the original SegWit proposal. This would prevent a chain split and fix any uncertainty that was previously caused.
Well this means a few things. First of all, most of the uncertainty is gone. If over 80% of miners signal for Bitcoin and all the blocks are locked-in, then there won't be a hard fork on August 1st and Bitcoin will no longer split. This plays a HUGE role in investor confidence. That's why we've seen the prices rally for the past couple of days.
As to why the miners suddenly decided to change their mind? That's anyone's guess. My prediction is that they saw Bitcoin plummeting to $1800 and were losing money. In order to stop this, they decided to start signaling for Segwit and come to an agreement, in order to regain investor's confidence and shift the market momentum.
With all of this taking place, I see us rallying for the next couple of days, especially since the lock-in is so close! I believe we'll see a lock-in by tonight and once that gets out, we'll see Bitcoin rally over $3000. Now for whatever reason, if the miners stop signaling for Segwit, and we see that 82.8% number start going down, then we may see a market downturn, especially if it gets below 80% before a lock-in. So pay attention to that over the next few hours, and set your stops in case it happens. This is an exciting time for everyone, and it always pays to be one step ahead!
Thanks for reading! Until next time, stay safe and happy investing :)
Sources: Bitcoin Isle
